Palantir CEO Alex Karp went nuclear on Michael Burry Tuesday, calling the famous short seller "bats--- crazy" for betting against his company and Nvidia. The explosive comments came after SEC filings revealed Burry's hedge fund holds massive put options worth over $1 billion against the AI giants, even as both companies post record earnings.
The gloves came off in Silicon Valley's highest-stakes betting war. Palantir CEO Alex Karp didn't mince words when he discovered Michael Burry - the investor who predicted the 2008 housing crash - had taken massive short positions against his AI company and Nvidia.
"The idea that chips and ontology is what you want to short is bats--- crazy," Karp told CNBC's Squawk Box on Tuesday. "The two companies he's shorting are the ones making all the money, which is super weird."
The beef erupted after SEC filings revealed Burry's Scion Asset Management holds put options with a notional value of $912 million against Palantir and $187 million against Nvidia as of September 30. That's over $1 billion in bets that the AI boom leaders will crash.
Burry's timing couldn't seem worse. Palantir just crushed Q3 earnings, beating Wall Street estimates and raising guidance. The data analytics company has been riding the AI wave hard, with government and commercial clients flooding in for its ontology platform that helps organizations make sense of massive data sets.
But markets are getting jumpy about AI valuations. Palantir shares still tumbled 9% Tuesday despite the strong earnings beat. The stock had surged 173% this year heading into trading, sporting a forward P/E ratio of 228 that makes even growth investors sweat. Nvidia also dropped over 2% despite its 50% annual gain.
"I do think this behavior is egregious and I'm going to be dancing around when it's proven wrong," Karp said, clearly relishing the thought of vindication. He went further, suggesting Burry might be engaging in "market manipulation" rather than making genuine investment calls.
The CEO's conspiracy theory got darker: "It's not even clear he's shorting us. It's probably just, 'How do I get my position out and not look like a fool?'" Karp speculated that Burry might be using the publicity to exit positions without admitting error.
Burry stayed characteristically silent when CNBC reached out for comment, declining to explain his AI skepticism. But he'd already telegraphed caution in a cryptic post on X last week to his 1.3 million followers: "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play."
